Business Directories

Africa losing billions in clean energy deals

Cape Town, May 13, 2010

Africa stood to lose billions of dollars because a lack of economic incentives and inadequate regulatory regimes made the continent unattractive for wind power companies, a top industry official said on Thursday.

Eduardo Gonzalez, Spain's representative to the Global Wind Energy Council (GWEC), said the world's poorest continent fares worst among other regions when it came to wind power generation.

Wind installed capacity in Africa and the Middle East is seen rising to about 5.1 gigawatts in 2014 from 1.5 GW in 2010, lower even than in the Pacific region, where capacity was seen rising to 6.4 GW in four years time from 2.9 GW this year.

'In the absence of the right wind measurements, political stimulus, regulatory framework and economic support, heavy investments in the renewable sector are going somewhere else,' Gonzalez told Reuters on the sidelines of an African wind energy conference.

Gonzalez said the GWEC estimated that total global new investments in clean energy projects would top $200 billion in 2010, rising from last year's $162 billion.

Global wind energy supply is expected to rise by 160 percent over the next five years with China and North America leading the low-carbon push, the GWEC said in April.

Gonzalez said Africa had 'extremely good' wind potential, especially in the Gulf of Suez in Egypt, in Morocco towards the western Sahara and in the Western Cape of South Africa.

South Africa's wind industry is the least developed with less than 10 MW of capacity in comparison to 400 MW in Egypt.

Promise was also shown in Tanzania and Kenya, where power utility KenGen last month invited companies to carry out feasibility studies on nine new wind sites as it seeks to diversify its energy mix.

'However, very little wind measurements have been taken in Africa and in order to develop projects we need measurements,' said Gonzalez.

He said African countries, fearful of expensive feed-in tariffs, should rather consider tax credits to encourage private investment as it moved to build its renewable energy sectors.

African wind investments

Gonzalez, also the communications manager for Spain's largest power utility Iberdrola, said they expected a final answer from Egypt next year on a 400 million euro ($508.1 million) 300 MW wind project bid in the north African nation.

'By the third quarter of 2011 we expect an answer,' he said, adding that, if successful, the company would install the wind turbines and operate the Gulf of Suez wind farm for 20 years.

However, he said Iberdrola would not invest in South Africa, the continent's biggest economy, until there was stability in the regulation of the wind energy sector.

South African power utility Eskom intends procuring a 100 MW wind farm, which could be scaled up to 200 MW, as it tries to lure investors in the renewable sector after introducing attractive feed-in tariffs.

'When there is a stable regulation for the wind sector in place with the right support mechanisms, we and the rest of the investors will flow down to South Africa... Until we see a stable regulation of the wind energy sector we won't come to South Africa, as simple as that,' Gonzalez said. – Reuters